Wiley GAAP 2008

Perspective and Issues

The term “interim reporting” refers to financial reporting for periods of less than a year. GAAP itself does not require interim reporting; however, since 1970, the SEC has required public companies to file quarterly condensed financial information on a Form 10‐Q. The information required in those interim reports is substantially less than is mandated under GAAP for annual financial statements, but the extent of informational content in interim financial statements is an evolving matter. For example, FAS 132(R), as amended by FAS 158, requires expanded disclosures about the costs of pension and other employee benefit plans and associated information in interim reports of both public and nonpublic companies (See Chapter 18 for details).

Interim financial reporting is one of the topics targeted by the FASB and its international standard‐setting peer, the IASB, for short‐term convergence, and thus there is the possibility that current US GAAP requirements for interim reporting could be altered to more closely resemble International Financial Reporting Standards (IFRS).

The basic objective of interim reporting is to provide current information regarding enterprise performance to existing and prospective investors, lenders, and other financial statement users. This enables these users to act upon relevant information in making informed decisions in a timely manner. The demand for timely information (e.g., SEC filings on Form 10‐Q are due in no greater than 45 ...